Thursday, September 20, 2007

For personal reasons, the Pithlord has decided to call it quits for the foreseeable future. I will leave comments open for a week and then cut them off so they don't get overwhelmed by spam.

I have enjoyed finding a small (but elite!) readership for my random thoughts about law, politics and philosophy. However, as anyone who has tried it knows, blogging is addictive and time consuming, and there are other things I really ought to be doing.

So thank you all, and farewell!

Update September 26, 2007: Thanks everyone for all the kind comments. Now I know how politicians feel when they leave the stage and they get nothing but praise. The trick, of course, is not to believe it too much (see Clark, Joe). Still, it's much appreciated.

Monday, September 10, 2007

Long-time readers will remember I went out on a bit of a limb, and predicted Obama would win the Democratic nomination. The truth is that if I was actually putting money down on this, I'd want odds: Hillary will probably be the actual winner. Still, I'd buy Obama contracts at the market price (assuming, counterfactually, that I could induce my spouse to agree to such a frivolous expenditure).

The Republican field is more difficult. It's not really that they are, in an objective sense, weak candidates: the top tier all have individually more impressive accomplishments than Bush or the 2008 Democratic contenders. And yet. Giuliani's position on abortion seems likely to doom him for the nomination, and maybe make a devestating third party challenge inevitable if elected. It is hard to really imagine a woman voting for him (although it is also difficult to see men enthusiastic about Ms. Clinton.) Conventional wisdom holds that McCain is doomed in the primaries, and conventional wisdom is probably right. That leaves Romney and Thompson. I guess by elimination one of them is going to get it, and I'd bet on Thompson for now.

I'd say the probability of the Democrats taking the White House is about 60%. They are almost certain to retain the House and the Senate, although I don't think they'll improve their margin very much.

Sunday, September 09, 2007

You will jolly soon see whether she has an idea that I havnt put into her head or a word that I havnt put into her mouth. I tell you I have created this thing out of the squashed cabbage leaves of Covent Garden [...]

The good news is that most of Matthew Yglesias's liberal commentariat reacted strongly against his preposterous argument that studies showing men and women are looking for different things in their mate search must be false because they aren't counter-intuitive enough. Subtle points aren't really necessary here, but some were made. One good point (and one relevant to our discussions of the Lancet study) is that if you can show a statistically significant effect with a small sample size, then the underlying effect is likely to be large. Everyone knows the die is loaded, but if you can figure it out after 10 throws than the loading is rather less subtle than if it requires 100.

Everyone quickly realized that the more interesting question is why someone as intelligent and analytical as Yglesias would try to dispute such an obvious point. Many a biological reductionist speculated that he was trying to ingratiate himself with young feminists with high indicia of fertility. Although no sensible feminist should dispute that male and female sexuality differ from each other (if they didn't, the feminist concentration on regulating male sexual aggression would make no sense), social constructionism is the party line, and it doesn't pay to deviate from it.

I suspect there's something to that explanation, but it misses something. The idea that gender differences in sexual behaviour and preferences for cleanliness could be overcome by new socialization has to be deeply appealing to young hetereosexual men. As Henry Higgins pointed out, it is downright inconvenient that women are ... women.

Of course, that means that the male and female feminist aren't really dreaming of the same utopia at all. They each hope that, in time, the other will become like themselves. Good luck with that one.

Wednesday, September 05, 2007

Much has (quite properly) been said about the Bush administration's aversion to science. However, I'd be interested if there is anyone on the right saying something like this:

[U]nlike a lot of my political fellow travelers I don't think this kind of inquiry into the relationship between global temperature and carbon dioxide emissions to be inherently wrongheaded or absurd, but I think people need to be much more careful about this stuff. To have an entire research program that seems dedicated to upholding enviro folk wisdom is odd and an awful lot of the specific empirical research turns out to be incredibly hollow.

I admit that the second sentence is pretty easy to imagine, but we would find it pretty chilling if a respected rightist pundit warned scientists they needed to be "careful." And who wouldn't ridicule someone who admitted that most of their co-thinkers believe inquiry into an empirical relationship to be "inherently wrongheaded or absurd."

But when it comes to differences in sexual strategies between men and women (something EVERYBODY has in fact noticed in their own lives, and the absence of which would be completely inexplicable given all we know of evolutionary biology), someone as clever as Matthew Yglesias can, without embarrassment, provide dark warnings to scientists to be "careful", make sophistical arguments that the fact that everyone in every culture knows something to be the case makes it unlikely to be true, impugn the integrity of hundreds of researchers he doesn't know, and generally make a fool of himself.

Monday, September 03, 2007

The Pithlord hates the folksy politician-speak found in the Introduction to 1994's "Common Sense Revolution" document as much as the next arrogant elitist. I am opposed to a "fresh look" at anything, let alone the principles of governance. I doubt I want even the most chaotic of polities to be more like my family.

But beneath the populist verbiage, "Mike Harris" puts forward two propositions which, I submit, are worthy of further attention. First, that too few people were working in Ontario in 1994, and the way to change that was to make it cheaper to hire them. And second, that the value received for each tax dollar had declined since 1984, and the way to reverse that decline was to spend less. We might agree that the historic value of the CSR depends on the truth of these two propositions.

The first proposition -- about employment -- goes to the heart of whether the CSR was good or bad for social cohesion. Pretty much every social problem is correlated with the number of jobless young men. Further, a society -- particularly a multi-ethnic society -- can only survive if there is a general sense that everyone is pulling their weight and their is some relationship between reward and effort. Through most of its history, Ontario has done well on both scores. The early 1990s were an exception, as anyone living there at the time can recall quite vividly.

The twin problems of high unemployment and low labour force participation were undeniable. The only reasonable subject of dispute was who or what was to blame for them. From the point-of-view of 2007, it is hard to deny the economic benefits of free trade with the US or inflation targeting by the Bank of Canada. But they did require a wrenching transition for the Ontario economy in the early 1990s. Defenders of the Rae government are not wrong to point this out.

However, neither monetary policy nor trade policy were within the control of the provincial government. The NDP could try to boost aggregate demand through deficits, but whatever they did, the Bank of Canada could neutralize it. Rae himself realized this after a year or two. There is no way to painlessly open up a protected economy or bring down inflation. But these macroeconomic factors will not cause mass structural unemployment if the labour market is flexible. The fundamental problem in Ontario in 1994 was that it was the very opposite. The NDP had basically made it impossible to legally create a new job.

Lack of employment has not been a major political issue for Ontario since the 1995 election. That, in itself, is as much of a tribute to the CSR as it needs. As a result, while I can't dispute that the Harris government was politically polarizing, I'd argue that it left Ontario a more socially cohesive place than it found it.

The second major point "Harris" makes in the Introduction is that government spending has diminishing marginal returns. I don't suppose anyone would argue otherwise in the abstract. For any level of spending, the last tax dollar be spent less effectively than the first, and the last tax dollar will cause more loss of private wealth than the first. I haven't attempted a close empirical comparison between outcomes for public services in 1984 and 1994, but my recollection corresponds to the assertion in the CSR that matters were not greatly improved. Doubling the tax take roughly quadruples the tax burden. So children should have been educated four times better in 1994 than in 1984, patients cured four times as fast and the streets been four times as safe to justify the spending explosion under Peterson and Rae. If someone wishes to claim such prodigious improvements in the comments box, they are welcome to do so.

So in initial defence of the CSR, I would say that it got to two critical issues -- employment and the effectiveness of the public sector -- and provided an essentially correct diagnosis and cure. Not bad.

The Chief Economist at Midland Walwyn, one of Canada's most respected securities firms, concludes...

"This plan will work. The Mike Harris plan to cut provincial income tax rates by 30% and non-priority services spending by 20% will give Ontario a balanced budget within four years, and create more than 725,000 new jobs."

- Mark Mullins, Ph. D. (Economics)

The people of Ontario have a message for their politicians -- government isn't working anymore. The system is broken.

You sent that message when you handed the provincial government its dramatic defeat in 1990. You sent it in the referendum campaign in 1992. You sent it in the federal election. And yet, no one seems to be listening.

Over the last few years, I have been out talking with the people of Ontario. In Town Hall meetings, in living rooms and around kitchen tables.

I have heard your message. You are looking for a Common Sense Revolution in the way our province is run. Well, I'm prepared to actually do something about it.

It's time for government to make the same types of changes all of us have had to make in our own families and in our jobs. If we are to fix the problems in this province then government has to be prepared to make some tough decisions.

I'm not talking about tinkering, about incremental changes, or about short term solutions. After all, the changes we have all experienced in our personal lives have been much more fundamentalthan that.

It's time for us to take a fresh look at government. To re-invent the way it works, to make it work for people. While many goals remain important to us -- creating jobs, providing safe communities, protecting health care -- we are governed by a system that was designed to meet the needs of the 1950's, not the challenges of the 1990's or beyond.

It's time to ask ourselves how government spending can double in the last ten years, while we seem to be getting less and less value for our tax money....

To ask ourselves why we spend more money on education than ever before, but our children aren't able to get the kind of education they need to secure a good and prosperous future....

Time to ask ourselves how we can spend more and more money fighting crime,while our streets end up becoming more dangerous.

I have been troubled by these realities for some time. I fear Janet and I cannot hope for a better future for our children.

I want to do something about it. So, today I'm putting forth a plan to help build a better future.

There are more than half a million people unemployed in this province. The bottom line is that Ontario needs jobs. This plan will create more than 725,000 new jobs over thenext five years.

Ontario is among the highest-taxed jurisdictions in North America. There have been 65 tax increases in the past decade, including 11 hikes to your income tax.

This plan will cut your provincial income tax rate by 30%. Government spending has more than doubled in the past ten years, pushing both the tax burden and the provincial deficit higher.This plan will reduce non-priority government spending by 20%.

Too many services essential to the public are now being cut, or are under such financial pressure that the quality of service is in danger.

This plan guarantees full funding for health care, law enforcement, and education spending in the classroom.

This is not a wish list or a bunch of empty political promises. This is a solid plan based on four years of study, analysis, consultation with workers, employers, party members and ordinaryOntarians through extensive public hearings.

To be sure of our conclusions, we subjected this plan to an independent analysis by one of Canada's leading economic experts.

In short, our plan will work, and bring hope, opportunity and jobs back to Ontario.

There is nothing wrong with Ontario that a new vision, a new direction and turn-around management can't fix.

We can build a safe and prosperous province, but first we need a major change in the way government works.

It will not be easy, but it CAN be done, and it WILL be worth it.

In order to create the jobs we so badly need, and to renew our economy, we will have to set priorities and stick to them.

Tinkering with the system will not be enough. It is time for fundamental change, and change is never easy.

The political system itself stands in the way of making many of the changes we need right now.

Our political system has become a captive to big special interests. It is full of people who are afraid to face the difficult issues, or even talk about them. It is full of people doing all too well as a result of the status quo.

We need a revolution in this province....a Common Sense Revolution.

It will be a revolution of practical ideas for making government work better for the people it serves, and a revolution against the last ten years of government thinking when it comes to jobcreation.

Ontario needs jobs today, and jobs tomorrow.

This plan will show you how this can be done....how Ontario can once again become an economic powerhouse, full of hope, opportunity and real jobs.

If you believe, as I do, that we need lower taxes, less government and 725,000 new jobs in Ontario, I am asking you to join me in my fight for a Common Sense Revolution.

Ben Bernake's academic work is all about limiting monetary policy to restraining price inflation. Asset prices aren't supposed to matter. And that theory has had practical consequences: through all the worries about housing and stock market bubbles, the Fed has refused to raise rates unless these phenomena fed into price inflation. Not surprisingly, housing and stock market bubbles have resulted.

But in the wake of the subprime crisis, it now appears that the Fed will lower rates to avoid a collapse of the housing market. According to the FInancial Times:

Federal Reserve governor Frederic Mishkin set the stage for an aggressive monetary policy response by the US central bank to any fall in house prices in his presentation to the Jackson Hole symposium this weekend.

Mr Mishkin told fellow central bankers and top economists gathered for the annual retreat organised by the Kansas City Fed that policymakers should not wait until a decline in house prices leads to a fall in gross domestic product, but should “react immediately to the house price decline when they see it”.

The problem with this approach is that it is asymmetrical. Losses are bailed out: gains are not similarly curtailed. This creates a "moral hazard": the rational investor will take more risks on the upside if the downside is insured. The predictible consequence is more bubbles and more bailing out of the risk takers at the expense of those holding money.

Saturday, September 01, 2007

We encourage digressions in the Pith & Substance comment threads. And so there was nothing unusual about a discussion on the merits of the Common Sense Revolution (both the 1994 document and the post-1995 event). The debate caused me to look for the document on the Internet. Wikipedia provides a link, but it is now dead. It seems the Ontario PC's had it on their website until August 2005. Comparisons to the airbrushing of Trotsky and Zinoviev from Politburo get-togethers are unwarranted. I'm sure there is some innocent explanation for why this rather important historic document was deleted.

Anyhoo, thanks to those who archive the Internet, I can provide a link here: http://web.archive.org/web/20051124195225/http://www.ontariopc.com/feature/csr/csr_text.htm

Update: The hypertext link doesn't work. You have to copy the URL and put it in your browser.

As I write, even that doesn't work because the Wayback Machine is offline.

I think it is a sad thing that the Common Sense Revolution is not available somewhere on the live web. So, pending any notice from copyright lawyers, I am going to start publishing it as a series of posts. Comment away.